A survey of business failures with an emphasis on prediction methods and industrial applications

The considerable interest in the prediction of business failures is reflected in the large number of studies presented in the literature. Various methods have been used to construct prediction models. This paper provides a review of the literature and a framework for the presentation of this information. Articles can be classified according to the country, industrial sector and period of data, as well as the financial ratios and models or methods employed. Relationships and research trends in the prediction of business failure are discussed.